Does Worcester lack the values needed for a vital start-up common?

Wednesday

Jan 16, 2013 at 6:00 AM

By Peter S. Cohan WALL & MAIN

Silicon Valley has a very clearly articulated set of values that hinge on expanding the opportunity available to entrepreneurs and investors. This makes me question whether Worcester has the right values to create a truly vital Start-up Common.

Mike Maples, a founder of Floodgate, a venture capital firm believes that these values originated in the gold rush of the 1850s. As Maples explained, “The gold rush happened in Northern California primarily. If you think about the gold rush for a second, you say, Okay, I'm in a river next to you and we're both panning for gold, and then you fish out this huge rock of gold and you're rich.”

Mr. Maples believes that someone nearby would see that happen and conclude that he should keep panning because the other fellow is no smarter. Mr. Maples continued, “I look at you and I'm sitting there in the river away from you. How do I interpret that? Well, I probably don't come away thinking, "Oh, he's so much smarter than I am." I might instead conclude, "Wow." First of all, there really is gold in these rivers; second of all, if I stay in the river and keep panning for gold, I'm liable to get me some too.”

Mr. Maples believes that the roots of Silicon Valley came from Leland and James Stanford and the gold rush.

“The default assumption should be idealism. Everybody knows somebody who struck it rich, and it could happen for you at any time. Don't over-think it, just get in the game. Those roots were well in place even before [Stanford professor] Frederick Terman encouraged [William] Hewlett and [David] Packard to start HP out of the garage.”

While Mr. Terman’s efforts to push HP to sell to the Defense industry helped it get off the ground, Mr. Maples believes that Silicon Valley began to accelerate in the 1970s and 1980s. As Mr. Maples explained, “A lot of the early founders of these companies were very free market oriented, were very much oriented towards growing the pie; understood that it didn't make sense to fight over the current map, because the map hadn't even been drawn yet.”

He believes that American explorers shared that philosophy. Mr. Maples said, “You know, when you're Lewis and Clark and you're discovering the Louisiana territory, you're not worried about fighting over a tiny little municipality that's already been discovered. You're like, "Holy crap, look at all this undiscovered land, let's go!”

Mr. Maples concluded, “I just think that a mindset of abundance and idealism drove people to conclude that you don't have to lose for me to win, so we might as well help each other.”

The Silicon Valley Start-up Common is also very protective of itself. That means that everything someone does once they enter will be known to the members who check before working with someone they don’t know. As Constantin Delivanis – who came from Egypt to Silicon Valley -- explained, the conversation goes something like this: ’Hey, what do you think of Peter? Is Peter a good guy?’ There’s politeness [in answering 'No'] — ‘Peter is a good guy, but if you want legal advice, you go to John.’”

Not all regions of the U.S. share these values. Anecdotal evidence suggests that Atlanta and Los Angeles (or at least its major industry) have the opposite values. Two interviews provide examples of the higher value they place on individual effort to grab the largest possible piece of a limited pie:

• Los Angeles. “Part of the problem with Los Angeles is that the entertainment culture focuses on greed and individual success, not equity,” according to Los Angeles investor, Steve Painter• Atlanta. “[In Atlanta] if you made it, you’re on your boat and you’re gone. Successful entrepreneurs had zero social feeling because they didn’t get any help; they had to do it on their own,” said Appecelerator CEO, Jeff Haynie.

Los Angeles does not have much of a high tech start-up scene, nor does Atlanta. The emphasis on making it for yourself, rather than helping build up the start-up common by giving back seems to help explain part of that.

But what does this mean for Worcester? Tim Loew said that in his view, Worcester’s “regional culture is pretty collaborative. We have talent and we share ideas freely. In Worcester, people put down their swords and shields and work together. I’ve had terrific experiences working with lots of different people who did not know me before. We help each other because we’re in this together.”

But the evidence of the right community values for a vital start-up common should be reflected in a high level of start-up activity. If Worcester has the right values for an effective start-up common, they may be a necessary – but not sufficient condition. If not, it might be worth investigating what’s missing and how to add the missing ingredients.